1. Marsden, Collisions at Sea, 13th edn., 2003 at para. 1–20.

2. Shipowners insuring under American or Norwegian conditions, for example, may have
full four-fourths cover.
3. International Hull Clauses (01/11/03) Clause 6.1. sets out the three-fourths rule.
Because the cover available under the one-fourth P&I collision liability rule is purely
supplementary, and not a substitute for a member’s hull cover, it is thought unlikely that a
member could recover from his club if his hull policy would have responded, but does not in fact
do so—for instance if the relevant hull underwriter is insolvent.
4. For a comprehensive list of damages claimable from the owners of a ship found to be
at fault for the collision see Marsden, Collisions at Sea, 13th edn. 2003 Chapter 15.
5. As to wreck removal expenses, see Burger v Indemnity Mutual Mar. Ins. Co [1900] 2
QB 348; The ‘‘North Britain’’ [1894] P. 77; Tatham v Burr [1898] AC 382; Chapman v Fisher
(1904) 20 TLR 319. See infra.
6. See para. 10.5(v) below.
7. See Arnold, Law of Marine Insurance and Average 17th edn., 2008, para. 23–26 and
The Orjula [1995] 2 Lloyd’s Rep 395 (a spillage on or in a vessel can be ‘‘damage’’). Damage to
the entered ship caused by intervention to control pollution normally falls within the Pollution
Hazard Clause in the hull policy.
8. Currently US$1 billion in most clubs.
9. As to which see Marsden Collisions at Sea, 13th edn., 2003, at paras. 7–18 to 7–20.
The negligent navigation defence has been abolished in the Hamburg and Rotterdam Rules.
10. See Steamship Mutual Underwriting Assoc. v Landry, 281 F. 2d. 482 (1st Cir. 1960).
11. The clause was introduced as a result of the decision in Simpson v Thompson (1877)
3 App Cas 279. The ‘‘sister-ship’’ clause is now contained in clause 7 of the International Hull
Clauses (01/11/03).
12. France, Fenwick & Co Ltd v Merchants Marine Ins. Co [1915] 3 KB 290; for a
discussion of the meaning of ‘‘contact’’ see The Nassau Bay [1979] 1 Lloyd’s Rep 395. Hull
underwriters would not therefore cover a claim where a vessel runs aground or collides with a
third ship as a result of an entered vessel’s negligent navigation: The ‘‘Eglantine’’, ‘‘Credo’’
and ‘‘Inez’’ [1990] 2 Lloyd’s Rep 390.
13. McCown v Baine [1891] AC 401.
14. [2010] 1 Lloyd’s Rep 158.
15. Rule 15 of the Rules for Construction of Policy in Schedule 1 to the Marine Insurance
Act 1906, provides: ‘‘ ‘Ship’ includes hull, materials and outfit, stores and provisions for the
officers and crew, and in the case of vessels engaged in a special trade, the ordinary fittings
requisite for the trade, and also, in the case of a steamship, the machinery, boilers, and coals and
engine stores, if owned by the assured.’’
See also Merchant Shipping Act 1995, section 313. For a review of English authorities,
see the US decision in Trinidad Corporation v American Steamship Owners Mutual Protection
and Indemnity Association, 229 F.2d. 57 (2nd. Cir. 1956), cert. denied 351 US 966 (1956). As to
small craft, see Edwards v Quickenden [1939] P 261; Southport v Morris [1893] 1 QB 359; Ex
parte Ferguson (1871) LR 6 QB 280.
16. Margetts v Ocean Corp. [1901] 2 KB 792.
17. Bennett S.S. Co Ltd v Hull Mutual Steamship Protecting Society Ltd [1913] 3 KB
372; [1914] 3 KB 57 (CA).
18. Pelton S.S. Co Ltd v North of England P&I Association (1925) 22 Ll L Rep 510 at
513 per Greer J. See also The ‘‘Olympic’’ [1913] P 92; Barras v Aberdeen Steam Trawling and
Fishing Co [1933] AC 402; Marsh v Lensen Shipping Ltd [1938] P 109; The ‘‘Zela’’ [1893] AC
468; Manchester Ship Canal v Horlock [1914] Ch 199. As to a vessel which has been converted
into a buoy, see Wells v Gas Float Whitton (No. 2) [1897] AC 337; The ‘‘Upcerne’’ [1912] P
160. As to newly launched vessels, see The ‘‘St. Machar’’ (1939) 65 Ll L Rep 119; The
‘‘Andalusian’’, (1877) LR 3 PD 182.
19. See, The Raft of Timber (1844) 2 W. Rob. 251; Hedges & Son v The London and St.
Katherine’s Dock Company (1885) 16 QBD 597; Watson v R.C.A. Victor Company Inc (1934)
50 Ll L Rep 77; The ‘‘Mudlark’’ [1911] P 116; The ‘‘Mac’’ (1882) 7 PD 126; The ‘‘Harlow’’
[1922] P 175; The Lighter No. 3 (1902) 18 TLR 332; Wiener v Wilson’s & Furness Leyland
(1910) 15 Com Cas 294; Falconbridge v Cheemo Shipping [1973] 2 Lloyd’s Rep 469 (Canada);
The ‘‘Arcadia Forest’’ [1974] 2 Lloyd’s Rep 563 (US); B.T.D.B. v Barge Aboard, Catamaran
[1978] 2 Lloyd’s Rep 410; Cook v Dredging and Construction Co [1958] 1 Lloyd’s Rep 334;
The Blow Boat [1912] P 217; Steedman v Scofield [1992] 2 Lloyd’s Rep 162.
20. The ‘‘Craighall’’ [1910] P 207; The ‘‘Normandy’’ [1904] P 187; European &
Australian Royal Mail v P. & O. Steam Navigation (1866) 14 LT 704.
21. See Chrismas v Taylor Woodrow Civil Engineering Ltd and Sir Robert McAlpine Ltd
[1997] 1 Lloyd’s Rep 407.
22. The ‘‘Titan’’ (1923) 14 Ll L Rep 484; Merchants Marine Ins. Co v North of England
(1926) 43 Times S107, 32 Com Cas 167; Marine Craft Contractors Ltd v Erland Blomqvist
(Engineers) Ltd [1953] 1 Lloyd’s Rep 514.
23. Polpen Shipping Co Ltd v Commercial Union Assurance Co [1943] 1 All ER 162;
although see now, Harbours Act 1964, section 57(1). As to hovercraft, see Hovercraft Act 1968,
section 4(1).
24. See infra, at paras. 10.46–10.54.
25. See International Hulls Clauses (01/11/03), clause 6.1.
26. [1936] 2 KB 461; see also Hall Steamship Co v Young [1939] 1 KB 748.
27. Stoomvaart Maatschappij Nederland v The Peninsular & Oriental Steam Navigation
Co (1882) 7 App Cas 795.
28. Prior to 1911 damages were divided equally, but since the Maritime Conventions Act
1911, the division is according to whatever the degrees of fault of the two vessels; see now,
Merchant Shipping Act 1995, section 187 replacing the Maritime Conventions Act 1911, section
1.
29. The London Steamship Owners’ Mutual Insurance Association v The Grampian
Steamship Co (The ‘‘Balnacraig’’) (1890) 26 QBD 663.
30. I.e. prior to the enactment of the Maritime Conventions Act 1911 which brought into
force the 1910 Brussels Convention; see now the Merchant Shipping Act 1995, sections 187–
189.
31. (1890) 24 QBD 663 at p. 667, per Lord Esher MR. As to the principle of settlement
on a single liability, see New York & Cuba Mail Steamship Co v American Steamship Owners
Mutual Protection & Indemnity Assn. (Hamilton-Mexico), 72 F.2d. 694, cert. den. 293 US 622,
[1934] AMC 1594. As to the extent to which the phrase ‘‘any sum or sums paid’’ render
payment a condition precedent to indemnification see Raiffeisen Zentralbank Osterr ¨ eich AG v
Five Star Trading llc [2001] QB 825 at 857 and the Canadian decision in Conohan v
Cooperators 2002 FCA 60, 2004 AMC 1661 (Federal Court of Appeal).
32. See paras. 14.35 et seq. infra.
 33. See, for example, the standard wording of the Admiralty Solicitors Group (the ASG)
Collision Undertaking (ASG1). This undertaking will in many cases be provided by the vessels’
respective P&I Clubs providing security to the other vessel in respect of claims arising from the
collision. The form was designed to be used with the ASG Collision Jurisdiction Agreement
(ASG2) and represents the security which is envisaged in Clause C of ASG2. ASG2 is an
agreement between the two shipowners that claims be dealt with by the English courts according
to English law. Copies of these forms can be viewed and downloaded at
[Link]
34. See Appendix II(a), infra.
35. See Appendix II(b), infra.
36. See Appendix II(c), infra.
37. As to the applicable law, as from 11 January 2009, an EU court now has to resolve
this using the mechanism laid out in the Rome II Regulation on the Law applicable to Non-
Contractual Obligations in Civil and Commercial Matters. The presumption is that claims
involving damage to property are resolved in accordance with the law of the place where the
property is damaged: see recital 17 and Dicey, Morris & Collins The Conflict of Laws, 14th edn.,
2009, paras. 35–195 to 35–198.
38. [2003] 2 Lloyd’s Rep 107.
39. Ibid, paras. 20 and 31.
40. See the cases cited in Dicey, op. cit. para. 13–003 fn. 15 and Briggs and Rees, Civil
Jurisdiction and Judgements, 5th edn., 2009 para. 2–275 but cf. the The Maciej Rataj [1992] 2
Lloyd’s Rep 552 where the Court of Appeal held that where security is provided by club letter
after arrest, the action continues both in rem and in personam. A judgment can be given in rem if
there is no res before the court: The Nautik [1895] P 121.
41. See International Hulls Clauses (01/11/03), clause 6.4.2. In broad terms, the
American Institute Hull Clauses and Japanese terms follow the English market’s approach,
whereas hull cover is more extensive under The Norwegian Plan 1996, 2007 version (which
would usually cover contact (but not non-contact) damage to a fixed or floating object, as well as
claims for loss of use or removal of the wreck or property in question. The German DTV Hull
Clauses are even more extensive.
42. See paras. 10.19–10.20 supra.
43. Section 74.
44. See, for example, Workington Harbour & Dock Board v Towerfield (Owners) [1949]
1 P 10; [1951] AC 102; G.W.R. Co v Owners of the S.S. ‘‘Mostyn’’ [1928] AC 57.
45. This rule does not protect members in respect of liabilities in respect of bunkers; or
other third party properly on the vessel which is not being carried as cargo; see paras. 10.148 et
seq. infra.
46. Canada Shipping Company v British Shipowners’ Mutual Protecting Association
(1889) 22 QBD 727.
47. See paras. 10.175 et seq. infra.
48. See Chapter 12, infra.
49. Appendix I(s) and (t).
50. Section 26(1). This Act follows the OECD Paris Convention on Carriage of Nuclear
Material. The ‘‘excepted matter’’ is isotopes for industrial, commercial, agricultural, medical
scientific purposes, natural or depleted uranium and matters prescribed in the Nuclear
Installations (Excepted Matter) Regulations 1965.
 51. Appendix I(q).
52. Under Article V it is possible for a carrier to increase his liabilities but not reduce
them.
53. See Chapter 24, infra.
54. Appendix I(c); once the 2009 Rotterdam Rules came into effect, it is anticipated that
these provisions in the Clubs’ Rules will be amended to provide for liabilities incurred under the
new Rotterdam Rules regime.
55. See Appendix I(g).
56. Hague, Hague-Visby Rules, Article IV, Rule 5(a).
57. Hague, Hague-Visby Rules, Article IV, Rule 5.
58. The same is true of falsely stating the date of receipt or loading or shipment of the
cargo in the bill of lading; see paras. 10.82–10.83 infra.
59. [2003] 1 Lloyd’s Rep 92.
60. Although, this was not found to be causative, as an accurate description of the goods
would still require clausing for discoloration, which in turn would have resulted in the shipper’s
first buyer rejecting the bills in any event.
61. The Atlas [1996] 1 Lloyd’s Rep 642.
62. The Sirina [1988] 2 Lloyd’s Rep 613.
63. See Brown Jenkinson & Co v Percy Doulton (London) Limited [1957] QB 621.
64. See para. 10.76 supra and paras. 10.82–10.83 infra.
65. Standard Chartered Bank v Pakistan National Shipping Corporation and Others,
supra (No.2) [1998] 1 Lloyd’s Rep 684.
66. Ibid at p. 686, per Cresswell J. See also, for example, Discount Records Limited v
Barclays Bank Limited [1975] 1 Lloyd’s Rep 444; United City Merchants (Investments) Limited
v Royal Bank of Canada [1982] 2 WLR 1039; Kwei Tek Chao v British Traders & Shippers
[1954] 2 QB 459.
67. See paras. 12.4–12.6 infra.
68. Infra paras. 12.23 et seq.
69. Anne Quinn Co v American Manufacturers Mutual [1974] AMC 655.
70. At one time an unjustifiable deviation amounted to a fundamental breach of contract
such as to deprive a shipowner of the benefit of any exemptions granted to him under the
contract of carriage: Joseph Thorley v Orchis Steamship Company [1907] 1 KB 660 especially at
p. 660, per Fletcher Moulton LJ; Stag Line Ltd v Foscolo, Mango & Company [1932] AC 328 at
p. 347, per Lord Russell; Hain S.S. Company Ltd v Tate & Lyle Ltd (1936) 41 Com Cas 350 at p.
354, per Lord Atkin, at pp. 362, 363 and 367, per Lord Wright. Since the demise of the doctrine
of fundamental breach of contract (see Suisse Atlantique Societe D'Armement Maritime S.A. v
NV Rotterdamsche Kolen Centrale [1967] 1 AC 361; Photo Production Ltd v Securicor
Transport [1980] AC 827) there is some doubt as to whether a shipowner who has deviated can
or cannot rely upon exemptions and limitations in the contract of carriage. There remains some
authority to the effect that the doctrine of fundamental breach survives in the case of deviations
under contracts of carriage of goods by sea; see Photo Production Ltd v Securicor Transport
Ltd, supra., at p. 845, per Lord Wilberforce. A contrary and preferable view is that deviation
cases should be assimilated to the principles of ordinary law of contract and so it should be a
matter of construction as to whether or not a shipowner is entitled to rely upon exemptions in the
contract of carriage; see The Antares [1987] 1 Lloyd's Rep 424 at pp. 429^4-30, per Lloyd LJ;
State Trading Corporation of India Ltd v M. Golodetz Ltd [1989] 2 Lloyd's Rep 277; The
Chanda [1989] 2 Lloyd's Rep 494 at p. 505, per Hirst J who deprived the shipowner of the
benefits of an exemption clause based not upon a rigid application of the doctrine of fundamental
breach but as a matter of construction of the particular contract concerned.
71. It should be noted that this exclusion is an instance where a deviation in a time policy
amounts to an exception to an insurer's liability; cf Marine Insurance Act 1906, section 46.
72. See para. 28.34 and Appendix 1(a) infra.
73. [Link]. Siderurgicia del Orinoco S.A. v London Steamship Owners’ Mutual Insurance
Association Ltd (The ‘‘Vainqueur José’’) [1979] 1 Lloyd’s Rep 557.
74. Ibid., at pp. 573, 580, per Mocatta J.
75. Paras. 10.66–10.69 supra.
76. Hague-Visby Rules, Article I(e).
77. Some masters engaged in the Gulf oil trade will say that they have rarely, if ever,
enjoyed the luxury of delivering their cargoes in exchange for a bill of lading: see The
‘‘Sagona’’ [1984] 1 Lloyd’s Rep 194 at p. 201. It was held in this case that delivery without bills
of lading in the Gulf oil trade was common but not universal practice and did not amount to a ‘‘
custom’’ of the trade; see ibid., at p. 203.
78. The Law Commission recognised that a bill of lading can take a year or longer to
reach a receiver; see Rights of Suit in Respect of Carriage of Goods by Sea, Report No. 196,
1991, p. 17, section 2–42.
79. For instance, where a bill of lading has a disclaimer along the lines of ‘‘weight,
quantity unknown’’, its value as a receipt is diminished: see The ‘‘Atlas’’ [1996] 1 Lloyd’s Rep
642. As evidence of the contract of carriage it is often not a wholly reliable recital as the contract
may be subject to the complex terms of an international convention such as the Hague-Visby
Rules and might incorporate terms of a charterparty that the shipper or receiver has never seen.
Also, unless and until a bill of lading has been endorsed, it is possible for details such as the
named consignee and port of destination to be changed.
80. Glyn Mills Co v E. & W. India Dock Co (1882) 7 App Cas 591 at p. 598, per Lord
Cairns.
81. See Sanders v Maclean (1883) 11 QBD 327 at p. 341, per Bowen LJ; Ross T. Smyth
& Co v Bailey Son & Co (1940) 67 Ll L Rep 147 at p. 156, per Lord Wright; Glyn Mills & Co v
E. & W. India Dock Co (1882) 7 App Cas 591 at p. 596, per Lord Selborne LC; Backer v
Meyerstein (1879) LR 4 HL 317 at p. 326, per Lord Hatherley; Kum and Another v Wah Tat
Bank Ltd and Another [1971] 1 Lloyd’s Rep 439 at p. 442, per Lord Devlin.
82. See The ‘‘Future Express’’ [1992] 2 Lloyd’s Rep 79 at pp. 95 and 99, per Judge
Diamond QC.
83. There are numerous instances where property can pass quite independently of the
involvement of the bill of lading; see The ‘‘Filiatra Legacy’’ [1991] 2 Lloyd’s Rep 337, where it
was envisaged that cargo would be delivered without bills of lading. See also The ‘‘Atlas’’
[1996] 1 Lloyd’s Rep 642. See also The ‘‘Future Express’’, supra, at p. 94.
84. Kum and Another v Wah Tat Bank Ltd and Another [1971] 1 Lloyd’s Rep 439 at p.
446, per Lord Devlin; The ‘‘Future Express’’ [1993] 2 Lloyd’s Rep 542 at p. 547, per Lloyd LJ.
85. See The ‘‘Future Express’’ [1993] 2 Lloyd’s Rep 542 at p. 547, per Lloyd LJ who
noted: ‘‘A bill of lading is not a negotiable. It is a document which is transferable by delivery.
Since it is not negotiable, the transferee of the bill can only acquire such interest as the transferor
is capable of transferring’’. This must be read subject to sections 24 and 25 of the Sale of Goods
Act 1979 and section 9 of the Factors Act 1889 under which a fraudulent seller can pass good
title to an innocent buyer. See also the discussion in Scrutton on Charterparties, 21st edn., 2008,
Articles A94–A104 at p.169–183.
86. Under the Carriage of Goods by Sea Act 1992 rights to suit are transferred to the
holder of a bill of lading. This statute simply confers locus standi on holders of bills of lading
and in that way adds to the mechanics of the bill of lading but does not alter the inherent nature
of the bill of lading by making it a document of title nor does it give a right of possession under
it; if it has such qualities it has them by virtue of the intention of the parties under the custom of
mercantile trade. It may be noted that The ‘‘Future Express’’, supra, would be decided
differently under COGSA 1992; see Lloyd LJ at [1993] 2 Lloyd’s Rep 546.
87. Lickbarrow v Mason (1794) STR 683.
88. Sewell v Burdick (1884) 10 App Cas 74; Sanders v Maclean (1883) 10 QBD 327 at p.
341, per Bowen LJ; The ‘‘Future Express’’, supra, at pp. 95 and 96.
89. The ‘‘Delfini’’ [1990] 1 Lloyd’s Rep 252 at p. 268.
90. See Barclays Bank v Commissioners of Excise [1963] 1 Lloyd’s Rep 81 at pp. 88, 89,
per Diplock LJ; see also Benjamin’s Sale of Goods, 7th edn., 2006, paras. 18.006–18.009.
91. CIF and FOB Contracts by D.M. Sassoon, 4th edn., 1995, para. 131.
92. See The ‘‘Future Express’’ [1992] 2 Lloyd’s Rep 79 at p. 90, per Judge Diamond
QC; [1993] 2 Lloyd’s Rep 542 at p. 548, per Lord LJ.
93. Sanders v Maclean (1883) 10 QBD 327 at p. 341, per Bowen LJ. This oft-quoted
phrase has recently been decribed as a ‘‘ hallowed’’ but ‘‘inexact metaphor’’; see The ‘‘Future
Express’’ [1992] 2 Lloyd’s Rep 79 at p. 95, per Judge Diamond QC.
94. See The ‘‘Future Express’’ [1992] 2 Lloyd’s Rep 79 at pp. 94–96; [1993] 2 Lloyd’s
Rep 542 at p. 547. Finlay v The Liverpool and Great Western Steamship Co Ltd (1870) 23 LT
251 at p. 255, per Martin B. The ‘‘Sormovskiy 3068’’ [1994] 2 Lloyd’s Rep 266 at p. 271.
95. See The ‘‘Sagona’’ [1984] 1 Lloyd’s Rep 194 at p. 198; The ‘‘Jag Dhir’’ and ‘‘Jag
Shakti’’ [1986] 1 Lloyd’s Rep 1. As to the tort of conversion, see Clerk & Lindsell on Tort, 19th
edn., with 4th supp., 2009, paras. 17.06 et seq.
96. Lord Denning put it this way: ‘‘The Contract is to deliver on production of the bill of
lading, to the person entitled under the bill of lading’’, see Sze Hai Tong Bank Ltd v Rambler
Cycle Co Ltd [1959] 2 Lloyd’s Rep 114. See also The ‘‘Houda’’ [1994] 2 Lloyd’s Rep 541 at p.
553, per Leggatt LJ.
97. See Carriage of Goods by Sea Act 1992, section 2(1).
98. The ‘‘Sormovskiy 3068’’ [1994] 2 Lloyd’s Rep 266 at p. 274, per Clarke J.
99. See The ‘‘Cap Palos’’ (1921) 8 Ll L Rep 309 at p. 312; Sze Hai Tong Bank Ltd v
Rambler Cycle Co Ltd [1959] 2 Lloyd’s Rep 114 at p. 120, per Lord Denning; The ‘‘Sormovskiy
3068’’ [1994] 2 Lloyd’s Rep 266 at p. 272, per Clarke J; The ‘‘Ines’’ [1995] 2 Lloyd’s Rep 144
at p. 152, per Clarke J.
100. See ‘‘The Sormovskiy 3068’’, supra.
101. Glyn Mills v E. & W. India Dock, supra, at p. 596, per Lord Selborne.
102. See Glyn Mills v E & W. India Dock, supra; Hollins v Fowler (1875) LR 7 QB 616;
LR 7 HL 757.
103. See Glyn Mills v E. & W. India Dock, supra; The ‘‘Tigress’’ (1863) 1 B & L 38;
Caldwell v Ball (1786) 1 TR 205; Finlay v The Liverpool and Great Western Steamship Co Ltd
(1870) 23 LT 251 at p. 255, per Martin, B.
104. See paras. 10.110–10.111 and fn.138 to para. 10.127, infra.
105. In The ‘‘Houda’’ [1994] 2 Lloyd’s Rep 541 at p. 549 it was held that the owner is
entitled to a reasonable time to consider an order to deliver without presentation of bills in a
situation where he was on notice that the bills were missing, lost or stolen.
106. See Sale of Goods Act 1979, sections 38, 39, 41–43, 44–46; The ‘‘Tigress’’, supra;
Vertue v Jewell (1814) 4 Camp 31.
107. Motis Exports Ltd v Dampskibsselskabet AF 1912 Aktieselskab [1999] 1 Lloyd’s
Rep 837; upheld on appeal in 2000: Motis Exports Ltd v Dampskibsselskabet AF 1912
Aktieselskab [2000] 1 Lloyd’s Rep 211.
108. Ibid., at p. 844.
109. The MSC Amsterdam [2007] 2 Lloyd’s Rep 622 (CA).
110. Mitchell v Ede (1840) 11 A & E 888; The ‘‘Stettin’’ (1889) 14 PD 142; The
‘‘Lycaon’’ [1983] 2 Lloyd’s Rep 548 at p. 555.
111. See The ‘‘Stettin’’, supra; London Joint Stock Bank v Amsterdam Co (1910) 16
Com Cas 102; Sze Hai Tong Bank v Rambler Cycle Co [1959] 2 Lloyd’s Rep 114; Barclays
Bank Ltd v Commissioners of Customs & Excise [1963] 1 Lloyd’s Rep 81 especially at p. 88.
112. Skibsaktiselskopet Thor v Tyrer (1929) 35 Ll L Rep 163 at p. 170. Later adopted by
Lord Denning in Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd, supra., at p. 120.
113. J. I. MacWilliam Co Inc v Mediterranean Shipping Co S.A. [2005] 1 Lloyd’s Rep
347.
114. Interstate Window Glass Co v New York N.H. & H.R. Co 133A 102, 104 (1926).
115. As to what might be a satisfactory explanation for the absence of the bills of lading,
see infra.
116. Barclays Bank Ltd v Commissioners of Customs & Excise [1963] 1 Lloyd’s Rep 81
especially at pp. 88–89, per Diplock LJ; The ‘‘Stettin’’ (1889) 14 PD 142.
117. For a party to sue in conversion he must have been either in possession of the goods
or have a proprietary interest in the goods which gave him an immediate entitlement to the
goods; see Clerk & Lindsell on Torts, 19th edn., 2009, at paras. 17–17 et seq. Possession,
simpliciter, of a bill of lading gives no proprietary rights over the cargo. Mere possession of a
bill of lading does not, of itself, give the holder a right to possession of the goods and so a mere
holder, without a proprietary interest, has no right to claim in conversion, see Glyn Mills v E. &
W. India Dock Co (1882) 7 App Cas 591; Bristol & West of England Bank v Midland Railway
[1891] 2 QB 263; Cahn v Pockett’s Bristol Channel Steam Packet Company [1899] 1 QB 643;
Fraser v Casper and Others (1920) 2 Ll L Rep 620; The ‘‘Future Express’’ [1992] 2 Lloyd’s
Rep 79 at p. 96, per Judge Diamond QC; [1993] 2 Lloyd’s Rep 542 at p. 548, per Lloyd LJ.
Where a shipper as seller under a traditional f.o.b. sale has retained the bills of lading but has
retained no title in the goods he will probably be in breach of the sale contract; see Concordia v
Richco [1991] 1 Lloyd’s Rep 475 at pp. 478–480; CIF and FOB Contracts, by DM Sassoon, 4th
edn., 1995, at para. 480a.
118. The ‘‘Houda’’ [1994] 2 Lloyd’s Rep 541 at p. 552, per Neill LJ; The ‘‘Sormovskiy
3068’’ [1994] 2 Lloyd’s Rep 266 at p. 274, per Clarke J.
119. See The ‘‘Stettin’’, supra; Trucks & Spares v Maritime Alliance [1951] 2 Lloyd’s
Rep 345; Barclays Bank v Commissioners of Customs & Excise [1963] 1 Lloyd’s Rep 81; The
‘‘Sormovskiy 3068’’ [1994] 2 Lloyd’s Rep 266 at p. 272, per Clarke J. But see the contrary view
of Rix J in Motis Exports Ltd v Dampskibsselskabet AF 1912 Aktieselskab [1999] 1 Lloyd’s Rep
837 at 842 (a point not considered on appeal).
120. In The ‘‘Houda’’, supra, the shipowner was faced with the unusual situation of the
bills being left behind in Kuwait at the time of its invasion and occupation by Iraq. At the time of
the vessel’s arrival at the discharge port the shipowner was not surprised by the absence of the
bills of lading as he knew that they had been left in Kuwait but did not know whether they had
been lost, destroyed or stolen. Eventually the owner discharged the cargo in return for a letter of
indemnity. Although the Court of Appeal decided that the owner was entitled to a reasonable
time to consider the situation and that he did not, under the terms of the applicable charterparty,
have to obey charterer’s orders to deliver the cargo without bills of lading (on this, see infra) it
was not required to rule on whether the owner was entitled to discharge without bills of lading.
121. The ‘‘Sormovskiy 3068’’, supra, at p. 274.
122. See para. 10.127 and fn.138 infra.
123. See infra. In Carlberg v Wemyss 1915 SC 616, it was said: ‘‘Neither the owner, his
agent, nor the Master can, I think, be called upon to accept a banker’s or any other guarantee of
indemnity, though such a thing is not unknown, and, in the event of total loss of the bill of
lading, might have to be resorted to, if necessary, at sight of the Court’’, per Lord Johnson at p.
624.
124. See Betts & Drewe v Gibbins (1834) Ad & E 57; Dugdale v Lovering (1875) LR 10
CP 196; Strathlorne S.S. Co v Andrew Weir (1935) 50 Ll L Rep 186; The ‘‘Sagona’’ [1984] 1
Lloyd’s Rep 194; The ‘‘Nogar Marin’’ [1988] 1 Lloyd’s Rep 412.
125. [1993] 1 Lloyd’s Rep 333.
126. [1994] 2 Lloyd’s Rep 541 at p. 558.
127. Ibid., at pp. 558 and 559.
128. Ibid., at p. 551, per Neill LJ.
129. [1990] 2 Lloyd’s Rep 252.
130. See The ‘‘Houda’’, supra, at p. 551; Carlberg v Wemyss Co, supra, at p. 624, per
Lord Johnson.
131. [1994] 2 Lloyd’s Rep 266.
132. Ibid., at p. 274, per Clarke J.
133. See Carlberg v Wemyss Co 1915 SC 616.
134. [1994] 2 Lloyd’s Rep 541.
135. [1988] 1 Lloyd’s Rep 342; see also The ‘‘Sormovskiy 3068’’ [1994] 2 Lloyd’s Rep
266 at p. 22.
136. Hicks v Raymond [1898] AC 22; Erichsen v Barkworth (1858) 3 H & N 894.
137. Carlberg v Wemyss, supra.
138. Under section 493 of the Merchant Shipping Act 1894 (repealed by the Statute Law
(Repeals) Act 1993, Sched. 1), the shipowner had a statutory right to discharge and warehouse
cargoes which arrived in the United Kingdom after 72 hours. There is probably no need for a
statutory permission to do this and where an owner can safely store cargo in the custody of an
independent contractor he should do so in appropriate circumstances and seek redress for storage
charges against whoever is at fault in failing to arrange delivery. The law and custom of some
other countries have similar facilities. Also, the courts of England have an equitable jurisdiction
to order discharge in appropriate circumstances; see The ‘‘Houda’’, supra, at pp. 553 and 558
particularly as to the position where the bills of lading are lost. Where the owner is unsure
whether or not to deliver or where the bills of lading is lost there is the possibility of having the
court decide the matter in an interpleader action: RSC Order 17, preserved by CPR, Sch. 1.
139. Lyle v Cardiff Corporation (1899) 5 Com Cas 954.
140. See Meyerstein v Barber (1870) LR 4 HL 317 at pp. 329–330; Barclays Bank Ltd v
Commissioners of Customs & Excise, supra; Sewell v Burdick (1884) 10 App Cas 74; Sze Hai
Tong Bank v Rambler Cycle Co Ltd [1959] 2 Lloyd’s Rep 114 at pp. 120–121; Carlberg v
Wemyss 1915 SC 616; Bristol and West of England Bank v Midland Railway Co [1891] 2 QB
653; Margarine Union GmbH v Combay Prince Steamship Co Ltd [1967] 2 Lloyd’s Rep 315;
Goodman v Boycott (1862) 2 B & S 1; The ‘‘Ines’’ [1995] 2 Lloyd’s Rep 144 at p. 159; The
‘‘Future Express’’ [1992] 2 Lloyd’s Rep 79 especially at pp. 100–102; The ‘‘Sormovskiy 3068’’
[1994] 2 Lloyd’s Rep 266 at p. 283.
141. See Chartered Bank Ltd v British India Steam Navigation Co Ltd [1909] AC 369;
Petrocochino v Bott (1874) LR 9 CP 355; cf. Sze Hai Tong Bank v Rambler Cycle Co Ltd.,
supra., Compania Importadora de Arroges Collette y Kamp S.A. v P. & O. Steam Navigation Co
(1927) 28 Ll L Rep 63 at p. 69; The ‘‘Ines’’, supra; Motis Exports Ltd v Dampskibsselskabet AF
1912 Aktieselskab and Aktieselskabet Dampskibsselskabet Svendborg [1999] 1 Lloyd’s Rep 837
at pp. 845–847.
142. [1994] 2 Lloyd’s Rep 266.
143. Ibid., at p. 275. See The ‘‘Asiatic Prince’’ (1901) 108 Fed Rep 287.
144. Ibid., at p. 275.
145. [1994] 2 Lloyd’s Rep 266 at pp. 275 and 281.
146. See The ‘‘Ines’’ [1995] 2 Lloyd’s Rep 144.
147. [1994] 2 Lloyd’s Rep 266 at p. 275.
148. Supra at fn.146.
149. Ibid., especially at p. 154.
150. [2003] 1 Lloyd’s Rep 239.
151. [1987] 2 Lloyd’s Rep 655.
152. It should be noted that the case actually concerned a master’s refusal to sign a bill of
lading to be carried on board rather than the duty to deliver against an on-board bill of lading and
so the legality of the practice was not investigated thoroughly or ruled upon conclusively.
153. See para. 10.80 supra.
154. See Brown Jenkinson v Percy Doulton [1957] 2 Lloyd’s Rep 1.
155. See Miskin Manor Shipping v Herbert Clarke (1927) 29 Ll L Rep 282.
156. Copies of the most recent International Group recommended wordings can be
downloaded from most International Group Club websites; e.g. at
[Link]
157. Pacific Carriers v BNP Paribas [2004] HCA 35.
158. Laemthong International Lines Co Ltd v Artis [2005] 1 Lloyd’s Rep 688 (CA).
159. Farenco Shipping Co Ltd v Daebo Shipping Co Ltd [2009] 1 Lloyd’s Rep 81.
160. See The Jag Dhir and Jag Shakti [1986] 1 Lloyd’s Rep 1.
161. See para. 10.144 infra.
162. Limitation Act 1980, section 5.
163. Article III Rule 6 which provides, inter alia, ‘‘. . . the carrier and the ship shall in
any event be discharged from all liability whatsoever in respect of the goods unless suit is
brought within one year . . .’’ (my italics).
164. [1990] 1 Lloyd’s Rep 310 at p. 315 per Bingham LJ.
165. See also The ‘‘Zhi Jiang Kou’’ [1989] 1 Lloyd’s Rep 413; [1991] 1 Lloyd’s Rep 493
(Australia).
166. Article III Rule 6 provides, inter alia, ‘‘the carrier and the ship shall be discharged
from all liability in respect of loss or damage unless it is brought within one year . . .’’ (my
italics).
 167. [1980] 2 Lloyd’s Rep 317.
168. Pyrene v Scindia [1954] 1 Lloyd’s Rep 321.
169. In Sze Hai Tong Bank v Rambler Cycle Co Ltd [1959] 2 Lloyd’s Rep 114, it was
held that the Hague Rules did not apply to the failure of a carrier to effect a valid delivery after
discharge. See also Chartered Bank Ltd v British India Steam Navigation Co Ltd [1909] AC 369.
As to the time bar for misdelivery after discharge, the point was expressly left open in The
‘‘Future Express’’ [1992] 2 Lloyd’s Rep 79 at p. 102, per Judge Diamond QC.
170. See Carlberg v Wemyss 1915 SC 616; The ‘‘Ines’’ [1995] 2 Lloyd’s Rep 144; The
‘‘Sormovskiy 3068’’ [1994] 2 Lloyd’s Rep 266 at p. 283; Bristol and West of England Bank v
Midland Railway Co [1891] 2 QB 653; Margarine Union GmbH v Combay Prince Steamship
Co Ltd [1967] 2 Lloyd’s Rep 315; [1969] 1 QB 219; Goodman v Boycott (1862) 2 B & S 1; The
‘‘Future Express’’ [1992] 2 Lloyd’s Rep 79 at pp. 100–102.
171. In a London arbitration (No. 17/86) it was decided that the club’s cover in respect of
cargo liabilities does not extend to a member’s liabilities to a charterer in respect of salvage
services rendered to bunkers owned by the charterer.
172. 158 F. 3d 65; 1999 AMC 609.
173. By analogy with the approach of the Court of Appeal in Caudle v Sharpe [1995]
LRLR 433 to the construction of the word ‘‘event’’, where it was held that a continuing failure
by an underwriter to carry out proper investigations into the impact of likely asbestos exposure
on the London market gave rise to a separate occurrence on each occasion that he underwrote
one of a total of 32 run-off contracts.
174. s. 9(5) read with s. 9(6).
175. The Convention relating to the Carriage of Passengers and their Luggage by Sea,
1974 and Protocols thereto.
176. See para. 10.64 supra.
177. Article 1(8)(a) of the Convention.
178. See supra.
179. I.e. a guarantee in favour of the Federal Maritime Commission under Section 2 of
US Public Law 89–777.
180. Regulation (EC) No. 392/2009. There will be an optional later start date where the
carriage is wholly within the territorial waters of a member state and in respect of smaller classes
of vessels. The current limits under the 2006 Protocol are 250,000 SDR’s per passenger per
incident, or 340 million SDR’s per vessel, per incident.
181. Barnes G, author of Chapter 12 in Shipping Finance, Euromoney Institutional
Investor Plc, 3rd edn. 2006 p. 520.
182. The doubt arises from general principles and the decision in Gray v Barr [1971] 2
QB 554.
183. Sections 94–100.
184. See paras. 12.4–12.6 infra.
185. See para. 11.30 and paras. 19.2 et seq.
186. See paras. 11.11 et seq.
187. See para. 12.4 infra.
188. See paras. 11.37–11.42 infra.
189. Tinline v White Cross Insurance Assoc. Ltd [1921] 3 KB 327; MacGillivray on
Insurance Law, 11th edn., 2008 at paras. 14–46 to 14–50.
190. See Beresford v Royal Ins. Co [1937] 2 KB 197 especially at p. 219, per Lord
Wright.
191. See Tesco Supermarkets Ltd v Nattrass [1972] AC 153 (HL).
192. International Regulations for Preventing Collisions at Sea, 1972, regulation 5(2);
Merchant Shipping Act 1995, section 85; Marsden, Collisions at Sea, 13th edn., 2003, paras. 20–
21 et seq.
193. See MacGillivray, op. cit. fn. 189 supra., at para. 14–045 and the authorities cited.
194. See Bowmakers Ltd v Barnet Instruments Ltd [1945] KB 65 which laid down the
principle that a man cannot plead his own illegality to support his claim. The decision has been
considered in Euro-Diam v Bathurst [1990] 1 QB 35 and in Tinsley v Milligan [1994] 1 AC 340.
195. para. 10.175 supra.
196. See para. 5.6 supra.
197. See paras. 10.277 et seq. infra.
198. See paras. 26.9–26.11 infra.
199. Gregory v Ford and Others [1951] 1 All ER 121; Osman v J. Ralph Moss Ltd
[1970] 1 Lloyd’s Rep 313 (CA) especially at p. 320.
200. For offences under the Merchant Shipping Act 1995 (these include breach of the
Collision Regulations and offences in relation to unsafe ships and oil pollution) section 277 of
the 1995 Act provides that the directors and other officers of a corporate body may be found
guilty.
201. See Seaboard Offshore Ltd v Secretary of State for Transport (The ‘‘Safe Carrier’’)
[1974] 1 Lloyd’s Rep 75, QB (Div Ct) (a prosecution under section 32 of the Merchant Shipping
Act 1958 (repealed, see now section 100 Merchant Shipping Act 1995)), applying Tesco
Supermarkets Ltd v Nattrass [1972] AC 153 (HL).
202. Where there has been a breach of the Collision Regulations (supra) it is a defence
under regulation 5(2) of the Regulations for the defendant shipowner or master to show that he
took all reasonable precautions to avoid the commission of the offence. Owners who can show
that they have appointed properly qualified and competent masters and officers and show that
there was a system in place to ensure that their officers were aware of the Regulations and
complied with them, will find this defence more readily available than most masters who are
found to be in breach of the Collision Regulations.
203. In England, section 35 of the Magistrates’ Courts Act 1980 provides that a
defendant’s means should be taken into account in fixing the size of a fine. Nevertheless, in the
oil pollution case of Paderewski v The Tees and Hartlepool Port Authority [1982] JP 703, a
crown court said that it would be incorrect to take into account the fact that a master would be
indemnified by his employers, the shipowners.
204. See Bowstead and Reynolds on Agency, 18th edn., 2006, Chapter 7, article 61.
205. See Institute Time Clauses Hulls 1.11.95, Clause 6.2.4.
206. See sections 131 and 146(2) of the Merchant Shipping Act 1995.
207. See Lancashire County Council v Municipal Mutual Insurance Ltd [1996] 3 All ER
545.
208. See para. 10.181 supra.
209. See The ‘‘Bosworth’’ (No. 3) [1962] 1 Lloyd’s Rep 483.
210. See Rule D of the York-Antwerp Rules 1994; Lowndes & Rudolf, The Law of
General Average, 13th edn., 2008, op. cit., at paras. D.01–D.34; supra.
211. See para. 10.9 supra.
212. In a London arbitration (No. 4/88 reported in LMLN 227) members of a P&I Club
successfully argued that the Club Rule should not be interpreted so as to require that the ship was
a ‘‘wreck’’ in some technical sense but only that the owners had come under a legal liability to
remove her and that the word ‘‘wreck’’ was simply a handle given to the ship when in a
damaged, grounded or sunken condition which required her removal and there was no need for
the vessel to become a constructive total loss.
213. Smit Tak Offshore Services and Others v Youell and General Accident Fire & Life
Assurance Corporation plc [1992] 1 Lloyd’s Rep 154, where it was held by the Court of Appeal
that under so-called ‘‘umbrella liability’’ insurance there must be a legal liability to remove a
wreck and not mere commercial pressure. It has been held in a US decision that removal of a
wreck is ‘‘compulsory by law’’ under a P&I policy if the assured incurs the costs in the honest
but erroneous belief that the removal of the wreck was reasonably necessary to avoid legal
liability: Progress Marine v Foremost, 642 F.2d. 816; [1982] AMC 2315 (5th Cir.).
214. See the comprehensive account in De la Rue and Anderson, Shipping and the
Environment: Law and Practice, 2009, London.
215. See paras. 12.38 et seq. infra.
216. The International Convention on the Establishment of an International Fund for
Compensation for Oil Pollution Damage (the ‘‘Fund Convention 1971’’) Brussels, December
1971; Cmnd. 5061, which came into force in 1978 and enacted as part of English law by the
Merchant Shipping Act 1974. A protocol of 1992 gave rise to the Fund Convention 1992 signed
in London on 27 November 1992 which appears in Chapter IV (sections 172–182) of the
Merchant Shipping Act 1995, which was brought into force on 30 May 1996. Many states will
still apply the Fund Convention of 1971 (which appears in Schedule 4 of the Merchant Shipping
Act 1995) whilst others apply the Fund Convention 1992.
217. The International Convention on Civil Liability for Oil Pollution Damage 1992,
signed in London on 27 November 1992, replaced the International Convention on Civil
Liability for Oil Pollution Damage 1969 (‘‘CLC 1969’’) which was contained in the Merchant
Shipping (Oil Pollution) Act 1971 as amended. The 1971 Act was repealed and the new CLC
1992 now appears in Chapter III (sections 152–171) of the Merchant Shipping Act 1995. It may
be noted that the provisions of the CLC 1969, which still appear in Schedule 4 of the Merchant
Shipping Act 1995, will still be applied by numerous states that have not adopted the 1992
Convention but continue to adhere to the CLC 1969. For a detailed account of both conventions,
see De la Rue, op. cit., fn. 214 supra and paras. 27.7–27.30 infra. Chapter 2.
218. Article I.5.
219. Article VII; section 163, Merchant Shipping Act 1995.
220. Articles VII and X; sections 163(3) and 164, Merchant Shipping Act 1995.
221. See para. 27.23 infra.
222. See paras. 10.261–10.270 infra.
223. Copies can be downloaded from
[Link]
224. As to direct action generally, see Chapters 17 and 27, infra.
225. Article VII 8; section 165. It may be noted that the HNS Convention (International
Convention of Liability and Compensation for Damage in Connection with the Carriage of
Hazardous and Noxious Substances by Sea, 1996), which has yet to enter into force, has
compulsory insurance and direct action provisions comparable to those of the CLCs and the
clubs are expected to play a similar role in this as with oil pollution; see further, De la Rue, op.
cit. fn.214 supra, Chapter 7.
 226. See Marsden on Collisions at Sea; 13th edn., 2003, paras. 10.74 et seq.
227. Case C 188/07, 28 June 2008.
228. 75/442/EC. Now the Waste Framework Directive (2008/98/EC), but materially
unchanged.
229. See Chapter 19 infra.
230. See Institute Time Clauses Hulls, 1.11.95, Clause 7.
231. See TT The Law of Marine Insurance (Bennet), 2nd edn., 2006, para. 24.54.
232. See further, Law of Salvage, Kennedy & Rose, 7th edn., 2010, Chapter 6.
233. Clause 1(a).
234. See paras. 10.246 et seq. infra.
235. International Convention on Salvage 1989, which entered into force in the United
Kingdom from 1 January 1995; see the Merchant Shipping (Salvage and Pollution) Act 1994,
section 1(1), since repealed and replaced by the Merchant Shipping Act 1995, section 224. The
convention entered into force internationally in July 1996.
236. Article 14.
237. Article 13 provides for a successful salvor to take account of any success in
preventing or minimising damage to the environment; reimbursement of Article 13 enhanced
awards falls to underwriters of hull, cargo and freight.
238. SCOPIC, 2007 revision, sub-clause 2.
239. Ibid., sub-clause 3(i).
240. Code of Practice between the International Salvage Union and the International
Group of P&I Clubs, 22.6.2005 revision, para. 4.
241. Ibid., para. 5.
242. Scopic, 2007 revision, sub-clause 4.
243. Ibid., sub-clause 12.
244. Ibid., sub-clause 9(i).
245. Ibid., sub-clause 9(ii).
246. Ibid., clause 7.
247. See paras. 12.48 et seq., infra.
248. Merchant Shipping Act 1995, section 131, which makes the offence punishable with
a fine of £50,000 on summary conviction or an unlimited fine on a conviction on indictment. See
Federal Steam Navigation Co Ltd v Department of Trade & Industry [1974] 1 Lloyd’s Rep 520.
249. Merchant Shipping Act 1995, section 135.
250. Ibid., section 142.
251. Ibid., sections 137 and 139.
252. Ibid., sections 259, 260.
253. 7 September 2005. The United Kingdom gives effect to the directive by way of The
Merchant Shipping (Implementation of Ship-Source Pollution Directive) Regulations 2009 (SI
2009 No. 1210).
254. Paras. 10.175 et seq., supra.
255. See para. 10.178, supra.
256. Federal Register/Vol. 74, No. 125/Wednesday, 1 July, 2009/Rules and Regulations,
p. 31360.
257. See paras. 12.38–12.47, infra.
258. A copy of the Oil Pollution Charter Party Clause (Tankers), and the equivalent for
non-tankers can be downloaded from the BIMCO website. See fn.223 supra for the address.
 259. See paras. 9.1–9.3 supra.
260. As discussed above at paragraphs 10.173–10.174, the IG has bought an additional
US$1 billion layer of collective overspill protection, primarily designed to respond to the greater
risks of an overspill claim brought about by the enhanced limits under the 2002 protocol to the
Athens Convention.
261. See supra, Chapter 1.
262. See Chapter 3 supra.
263. See para. 5.6 supra.